Shares erased their gains for the week amid a second day of broad selling.
The ASX 200 slumped 42 points or 0.7% to 566o at the halfway mark after briefly trading below the index's seven-month closing low set late last month. The fall erased what remained of Monday's start-of-quarter rally as the local market once again ignored positive leads from the US. Overnight, the S&P 500 rallied 0.22% to a sixth straight gain and a fresh record close.
"The Australian share market faces a test today," Michael McCarthy, chief market strategist at CMC Markets, told CNBC. "After underperforming major markets in September, weakness returned in trading yesterday... [The] potential for a negative day looms if the top down sellers return."
ANZ was one of the principal drags, falling 1.7% and helping pull the financial sector down 0.8% after Morgan Stanley lowered its revenue forecast and rating. Also weak were utilities -1.5% and consumer discretionary -0.8%.
The energy sector slipped 1.5% as US crude tipped back towards US$50 a barrel. West Texas Intermediate crude futures were lately down 39 cents or 0.77% at US$50.03 a barrel.
Japan's Nikkei edged up 0.17%. Markets in China and Hong Kong remained closed for public holidays. Dow futures were recently off seven points or 0.03%.
Gold futures improved $2.90 or 0.23% this morning to US$1,277.50 an ounce. The dollar was buying 78.59 US cents.
Looks like Monday's market rally was no more than portfolio shuffling for a new quarter, rather than a change of mood. This still looks very much like a market that is more likely to break down than break upwards. Trading: snatched a wage from the early bounce in BGS. Stayed away since then because it was basically juggling dynamite - got away with it once...
